Bauer Business Focus

Energy Crisis and Supply Chain

Current issues could persist or get worse.

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The ongoing energy crisis in Europe and Asia seems to be going global. Professor Craig Pirrong with the Bauer College of Business at the University of Houston says this is primed to impact an already strained world supply chain.

“Europe and Asia are undergoing an energy crisis, with the prices of natural gas, coal and electricity rising to record levels, and some areas seeing electricity shortages. Big energy consumers are cutting production of some products, which could worsen the world's supply chain difficulties.”

“Prices of storable commodities like natural gas and coal are subject to periodic spikes in response to specific supply and demand conditions.”

“Last year's cold winter, this year's warm summer, a "wind drought" in the UK, and COVID's effects on energy production have conspired to cause the current spike, and the resulting low level of inventories means that the spike could persist, or get worse, for some time to come.”

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